Jet Airways woes continue, posts Rs 101 crore loss

NEW DELHI: Jet Airways posted its fourth straight quarterly loss as higher fuel costs, weak rupee and stiff competition from low-cost carriers continued to hurt the country's largest airline by market share. The Naresh Goyal-promoted airline posted a Rs 101.22 crore loss for the October-December period against a Rs 118 -crore net profit in the year-ago period.

"High fuel prices together with depreciating rupee have pulled down the operating results to an extent. However, yield improvements due to seasonality and narrowing gap between demand-supply imbalances have helped the airlines to post operating profits," Jet Airways CEO Nikos Kardassis said in a press release.

The disappointing results reflect the state of domestic aviation sector, which is reeling under debts. The Centre for Asia Pacific Aviation, or Capa, has estimated that domestic carriers will post a combined loss of $2.5 billion in the current fiscal. Indian airlines lose $25-30 every time a domestic passenger boards an aircraft, it said. A sharp fall in the rupee, too, has contributed to the losses.

"If the airline industry does not make structural changes, like pricing tickets at the right cost, FY13 could be as bad as FY12," said Sharan Lillaney, aviation analyst at broking firm Angel Broking. Jet clocked a 13.4% increase in sales to Rs 3,939.16 crore during the quarter, against Rs 3,473.38 crore in the year-ago period.

Traditionally, the December quarter is seen as a good one for the industry because of the holiday season. According to analysts, Jet's loss would have been higher but for the forex gains of Rs 180 crore during the third quarter. Kingfisher Airlines and low-fare carrier SpiceJet are yet to announce quarterly earnings, which analysts say will be disappointing.

"The industry is creating profitless growth because of under-pricing tickets. We have reached a stage where no lender will be ready to finance losses of airlines," said Kapil Kaul, CEO of Capa South Asia.

Jet's low-cost carrier operations have not been doing well, leading to a decline in its market share to 7.2% in the third quarter, against 7.4% in the year-ago period. "The merger of JetKonnect and JetLite would play a crucial role in turning around the low-cost carrier operations," said Sunil Sewhani, an analyst at Mumbai broking firm GEPL Capital.